Average 30-year mortgage interest rates drop to new low

Average interest rates on 30-year fixed-rate loans edged down to 3.88 percent this week for another record all-time low, Freddie Mac reported Thursday.

The 30-year fixed-rate home loans dropped from last week's average of 3.89 percent.

Average interest rates on 15-year, fixed rate home loans slightly increased to 3.17 percent, up from last week's 3.16 percent average. A year ago, the interest rate on the 15-year loan was nearly a point higher at 4.05 percent.

Total upfront costs this week for both the 15-year and 30-year fixed-rate loans averaged .8 percent, according to Freddie Mac. The buyers may also pay closing costs, which are not included in the survey.

However, many buyers won't get Freddie Mac's low average rates, Money magazine reported in its December issue. One of the reasons is that Freddie Mac's low rates require high credit scores and down payments of 20 percent or more, the magazine said.

Freddie Mac's average low rates also require more upfront fees than what some consumers are used to paying, added Freddie Mac spokesman Chad Wandler.

Freddie Mac's longer name is the Federal Home Loan Mortgage Corp. It is a government-sponsored enterprise set up in 1970 to buy mortgages on the secondary market to expand the money available for home loans.